ABIR praises Louisiana Department of Insurance over Hurricane Katrina handling
Bradley Kading, president and executive director of the Association of Bermuda Insurers and Reinsurers (ABIR), has praised the Louisiana Department of Insurance and Insurance commissioner James Donelon for the improvements made to the Louisiana home insurance market 10 years after Hurricane Katrina.
Kading said: "The steady hand of Louisiana Insurance Commissioner James Donelon is responsible for the creation of a stable and competitive property insurance market in Louisiana in the years following the devastation left by Hurricane Katrina. Consumers in Louisiana today are reaping the benefits of Commissioner Donelon's leadership and courage in steering the state through a politically challenging time."
"As the country faced its worst-ever hurricane loss event and the southeast tried to dig out from seven of the largest land-falling hurricanes in 2004 and 2005, it would have been politically expedient for policymakers to shift the home insurance market to state run enterprises.
“Instead, Commissioner Donelon focused policymakers on important hazard mitigation measures such as the new statewide building code and efforts to attract new home insurers to the market in an attempt to reduce an overconcentration that had previously existed in a few leading carriers.
The comments came as the Louisiana Department of Insurance and Donelon released a new report, titled "State of Insurance, 10 Years Post-Katrina”, which showcases improvements made to the market in commemoration of the ten-year anniversary of the disaster.
Improvements highlighted in the report include the creation of a statewide building code, attraction of 22 new property insurers, competitive market choices for Louisiana insurance consumers and a 50 percent reduction in the residual market population for home insurance as improvements since the disaster, as well as a reduction in "red tape" associated with insurer rate filings.
Foreign insurers and reinsurers, including those in Bermuda, provided more than 60 percent of insurance claims when Hurricanes Katrina, Rita, and Wilma hit Louisiana in 2005, According to economic research conducted by GSP Consulting Corporation in 2007, Bermuda reinsurers paid an estimated $17 billion in claims for the three storms.
Kading added: “By welcoming private sector insurers and reinsurers, Commissioner Donelon eliminated regulatory red tape, and gained the support of the governor and state legislature along the way."
"As we reflect on the 10-year anniversary of Hurricane Katrina, let us congratulate the Louisiana Department of Insurance and Commissioner Donelon for the tough choices they made over the last decade to ultimately improve the home insurance market that exists in the state today."